Louis Halpern's View on Internet & Hotel Marketing

Whilst the fragmentation of traditional media was already an unstoppable process a decade ago, there is no doubt that the digital revolution has added its own mix of rocket fuel which is becoming more potent with every technological advance. We’ve become a fractile society of individuals in a way that, as Lord Rees Mogg asserts in “The Sovereign Individual”, could eventually even undermine the power of nation states themselves. It will demand a radical re-assessment of the world we live in and the way that as humans we interact with each other.

As part of these seismic trends, marketers are ill-prepared for the changes in media that now loom on the horizon, all driven by the very industry we work in. As mass media disintegrates, those media owners holding the most valuable and precise information will be the new media kings, the new Randolph Hearsts. Make no mistake, these new media kings will be digitally-based and recent manoeuvrings by eBay, Yahoo, Google and Microsoft are a strategic recognition by these digital giants that information is the new currency.

By its simplest definition, media owners are intermediaries. They provide the content that allows advertisers to target their chosen markets. In the new digital paradigm, the role of media owner is still the same but is now exponentially more sophisticated. Google’s strategy is an undeclared recognition of this very fact. As the number one search engine they already know what you’re reading, what you are interested in, where you are going (Google maps) and their forays into the VoIP and mobile markets are significant because Google will eventually know everything about you.

Google’s strategy is replicated elsewhere across the net. Is it any coincidence that eBay has bought Skype? Or Yahoo Dialpad? It’s not a haphazard plan but a clear land-grab to not only own ‘growth services’ but to also own personal information and data. By aggregating that data and publishing it in the right way all these services will combine to provide advertisers with unparalleled personal information on each and every individual. It will be worth a fortune. It is the media industry of the future, and it is approaching more rapidly than people think.

The information collated on individuals will allow far more than preference advertising. It will allow precise delivery of relevant communications to millions of individuals in ‘real time’. It will also be delivered in a far more personal way, eventually via mobile which itself will supersede the computer and becoming the on and offline medium of choice over the next five years. Civil Liberty campaigners may bleat about privacy issues but I don’t think there is a privacy issue. On the contrary you are only seeing marketing messages that are relevant to you. And I stress the word ‘relevant’. Why, if I was looking for a new car and currently drove a BMW would I mind receiving an ad for a Mercedes E-Class?

The great advertising edifice, made up of TV, outdoor, radio and press is visibly crumbling. Omnicom OPera’s recent announcement that ITV1’s share of TV advertising revenues will fall from 46.8 per cent in 2005 to a forecast 43.3 per cent in 2006 (a drop of £82 million) is a staggering example of this. The old paradigm of mass media is now very quickly being replaced by precision-guided digital media targeting millions of individuals (with advertising budgets following suit). When people look back twenty years from now, 2006 will be viewed as the time that marketers and advertisers finally awoke to the recognition that the media owners of the future will be companies like Google and not the current media monoliths which are slowly becoming extinct.

Sara Kimberley’s upbeat analysis of digital media in Precision Marketing (29 July 2005) is a glowing evaluation of the sector’s current status. The direct marketing industry is now justifiably reaping the rewards of having stuck by a medium that in 2001 was the marketing equivalent of leprosy. Indeed, Zenith Optimedia substantiates the quoted IPA Bellweather report by estimating that whilst TV will grow by 1.5 % and press by 1.3% in 2005, online advertising will post a phenomenal 19 per cent rise. It’s an exciting time.

However, as an industry collective, this is no time to uncork the champagne and feel smug. Why? The key emerging digital trend is the amalgamation of many digital applications onto single platforms, most notably the mobile phone. MP3 players, cameras and radios are already integrated into new phones and with 46 million daily UK WAP page impressions just the start of the avalanche, the global market for downloading mobile content is set to become a multibillion-dollar industry within the next two years. The major problem here in the UK is that mobile phone operators take anywhere between 40-60% of revenue on mobile marketing campaigns. This is proving to be a severe barrier to any progressive marketers wanting to embrace the format. Moreover, mobile phone operators still only see themselves as vendors of phone minutes and line rentals with barely a glance aimed at the DM industry and marketing applications.
Mobile phone operators must create revenue models that encourage innovative marketing and re-brand themselves as content providers or face being trumped by other platforms and applications. With over £100 million being spent on mobile ads in Japan alone that country serves not only as a glimpse of an exciting digital future but also as a warning of a potential missed opportunity.

James Curtis’ piece on ‘the future of media’ (Campaign, 17^th March 2006) makes for compelling reading but falls down because it barely acknowledges the power of individual data. With one billion people worldwide currently having access to computers and with more than 800 million new mobile handsets being issued this year alone, only those media owners holding the most valuable and precise individual data will survive.
Recent manoeuvrings by Google are a tacit recognition of the fact. As the number one search engine they already know what you’re reading, what you are interested in, where you are going (Google maps) and their forays into the VoIP and mobile markets are significant because Google will eventually know everything about you. Google’s strategy is replicated elsewhere across the net. Is it any coincidence that eBay has bought Skype? Or Yahoo Dialpad? It’s not a haphazard plan but a clear land-grab to own personal information and data.
The information collated on individuals will subsequently allow precise delivery of relevant communications to millions of individuals in ‘real time’. It will also be delivered in a far more relevant and personal way, eventually via mobile (by 2010 it is estimated that over 125 million people worldwide will view television via mobile broadcasting).
Make no mistake, the empowerment of individuals and the power of digital consumer data is the key trend moving forward. As Rupert Murdoch said only last week, “power is moving away from the old elite in our industry…to a new generation of media consumers”. Whoever holds the data on these individuals will be crowned king.